Gold Price Forecast: XAU/USD Bulls Charge Towards 2K

Gold Technical Forecast: XAU/USD Weekly Trade Levels

Gold defends yearly range lows- rallies more than 10% off October extremes
XAU/USD bulls testing first major hurdles- constructive above yearly moving average
Resistance 1988, 2016, 2035 – Support 1925, ~1904, 1881/91 (key)

Gold prices are on a tear with a defense of the yearly range-lows now approaching initial resistance hurdles into multi-month highs. While the move does shift the medium-term technical outlook back to the topside, the immediate advance is now approaching key resistance hurdles and the risk rises for possible near-term exhaustion into the monthly close. These are the updated targets and invalidation levels that matter on the XAU/USD weekly technical chart into the October close.

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Gold Price Chart – XAU/USD Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; XAU/USD on TradingView

Technical Outlook: In my last Gold Weekly Price Forecast we noted that, XAU/USD was, “approaching confluent support into the yearly lows- looking for a reaction down here. From a trading standpoint, look to reduce short-exposure / lower protective stops on a stretch towards 1800- ultimately a close back above 1871 would be needed to alleviate immediate downside pressure.” Gold ripped higher the following week with prices surging more than 10.3% off the lows to breakout of the May downtrend. The move suggests that a more significant low was registered this month and shifts the medium-term technical outlook back to the long-side in gold.

The two-week rally was halted at confluent resistance last week around the 2022 high-week close at 1988- risk for some exhaustion while below November trendline (red). A break / weekly close above this threshold exposes subsequent resistance objectives at the record high-week close at 2016 and the 2020 record, high-close at 2035- look for a larger reaction there IF reached.

Initial weekly support now rests with the 38.2% retracement of the October range at 1925 and is backed closely by the 52-week moving average (currently ~1904). Key support / bullish invalidation now raised to 1881/94- a region defined by the 6.18% Fibonacci retracement and the objective May 22021 high-week reversal close.

Bottom line: Gold has marked a major reversal just ahead of the 2023 range lows with the rally now testing former slope support, as resistance. From a trading standpoint, pullbacks should be limited to the 52-week moving average IF price is heading higher on this stretch with a close above 1988 needed to fuel the next leg.

Note that key US inflation data (PCE) is on tap Friday with the FOMC interest rate decision and Non-Farm Payrolls (NFP) looming next week. Watch the weekly closes here for guidance and stay nimble into the close of the month. I’ll publish an updated Gold Short-term Technical Outlook once we get further clarity on the near-term XAU/USD technical trade levels.

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--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com

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